Lendinvest BTL Limited v Property Services LDN Limited
[2023] EWHC 1778 (Ch)
Moorwand Ltd v K Wearables Ltd
27 February 2023
[2023] EWHC 410 (Ch)
High Court
A company was sued for unpaid bills. They fought back by saying the other company lied about what services they would provide, which caused them to lose money. The judge believed them and threw out the lawsuit.
Key Facts
- •Moorwand Ltd (petitioner) filed a winding-up petition against K Wearables Ltd (respondent) for an unpaid debt of £56,462.23 under a card association issuing agreement.
- •K Wearables disputes the debt, claiming the agreement should be rescinded due to fraudulent misrepresentation by Moorwand regarding the provision of acquiring services, and/or that Moorwand provided poor service.
- •K Wearables alleges Moorwand misrepresented its in-house acquiring capabilities, inducing K Wearables to switch issuers.
- •Moorwand denies making any representation to provide acquiring services, highlighting that the agreement only covers issuing services.
- •Evidence includes emails, witness statements, and Moorwand's website and press releases, which contradict each other on Moorwand's acquiring capabilities.
Legal Principles
To dismiss a winding-up petition, the company must show a substantial dispute on grounds.
Re Bayoil SA [1999] 1 WLR 147; Wilson and Sharp Investments Ltd v Harbour View Developments Limited [2014] EWCA Civ 1030
The court considers whether the cross-claim was genuinely believed when raised, and reasons for not litigating it earlier.
Various cases referenced in the judgment
A debtor company can raise a set-off, counterclaim, or cross-claim in winding-up proceedings, even if it wouldn't be a defense under the contract.
Cases cited by Ms Vacani
A claim for rescission based on fraudulent misrepresentation may negate obligations under the agreement.
Judge's interpretation
Outcomes
The winding-up petition is dismissed.
The court found a serious and genuine cross-claim by K Wearables based on fraudulent misrepresentation regarding acquiring services. The cross-claim’s value, considering potential rescission, exceeds the petitioner's debt.
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